Primary voters have real choices

The Baltimore Sun

Critics of American politics - generally from the left - often say there's no difference between Democrats and Republicans.

Ralph Nader argued in 2000 that Al Gore and George W. Bush were virtually the same. Europeans like to say that all American politicians are conservative and that Barack Obama and Hillary Clinton would be mossbacks in Sweden or France.

Of course the monochrome view is wrong. For a forward-looking example, see what the candidates say about the mortgage and housing crisis, today's biggest economic issue. They present a wide swath of remedies, from multibillion-dollar government programs to doing essentially nothing.

Obama would spend $10 billion addressing the mortgage crisis in addition to other fiscal stimuli. He would create a huge program to counsel homeowners facing foreclosure, pay transaction costs for people forced to sell homes, and "partner with state governments, community organizations and loan providers" to modify mortgages.

He would also ease bankruptcy rules that make it difficult for judges or trustees to alter mortgage terms and appropriate more money for preventing and fighting mortgage fraud. Obama has promised to require much better disclosure to borrowers before they get a loan.

Minuses: Much of the $10 billion would probably go to agencies, government employees and other middlemen, not homeowners. Of course Obama's larger proposed stimulus would help consumers directly.

Pluses: Better disclosure for prospective mortgage borrowers is badly needed.

Obama doesn't fall into the trap of proposing sweeping modification of already-issued mortgages, which would be hard to implement and send the message that contracts are basically optional.

Hillary Clinton does, and she raises the possibility of forcing it on Wall Street. She has asked lenders to voluntarily stop foreclosing on homes for three months and freeze adjustable-rate mortgages for five years. But if the banks balk, "Hillary will propose legislation to tackle the problems in the housing market head-on," says her Web site.

She also wants to spend up to $5 billion on a plan similar to Obama's "to help communities and distressed homeowners weather the foreclosure crisis."

Minuses: A foreclosure moratorium would do little to address the main problem: Homeowners aren't paying lenders. Many people seem to have walked away from loans they can afford simply because the houses are worth less than the mortgage balance. Temporarily stopping foreclosures would prolong uncertainty and hinder the market from sorting itself out.

Pluses: A limited, voluntary program to freeze adjustable loans would be good for borrowers and lenders (who often don't like foreclosures much more than homeowners do).

Compare the Democrats' approaches with that of Republican candidate Mike Huckabee.

It "is not the purpose of government to prop people up from every poor decision they make," he told National Public Radio in December. "It needs to be handled by the two people who made the mistake in the first place - overambitious borrowers and greedy lenders who saw a way to suck people into interest rates that they should have known they couldn't afford in the long term."

Pluses: Saves taxpayers billions.

Minuses: A do-nothing government - and the perception that Washington is out of the game - could worsen an economic downturn.

Republican John McCain - like Mitt Romney, before he dropped out yesterday - encourages lenders to work with homeowners. But McCain's main mortgage palliatives are better disclosure for borrowers and fiscal stimulus that will help middle- and lower-class Americans whether they have mortgage problems or not.

"A mortgage should be one page and there should be big letters at the bottom that say, 'I understand this document,'" he said a week ago.

That's a reform both parties seem to agree on. On other issues, too, the candidates often seem to differ more in style than substance, especially within parties. But on the issue of confronting the country's biggest economic challenge in two decades, Tuesday's primary voters have genuine choices that go beyond the fancy TV ads.

jay.hancock@baltsun.com

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